Telcos well placed to lead cross-industry enterprises through business model transformation challenges

Fergus O'reilly Chief Solution Expert Next-Generation Billing SAP

Service monetisation is neither industry-agnostic nor exclusive to services-centric businesses. Existing industries with service-centric business models (e.g. telecom) and those who are moving to service monetisation from a product-centric world (media, high-tech etc.) are equally poised to benefit from this growing trend. However, those in typically product oriented businesses will face the greatest challenges in adopting fundamental changes required to move towards a monetisation model.

How to effectively evolve a service-centric business model?

Business models are in a constant state of flux. Even the most sophisticated pricing strategy can only attract a certain number of customer segments. Therefore, the need for multiple offers, individually packaged bundles and tailored offerings to meet the needs of individual customer segments is a must. Different price points, recurring fees and regularly and rapidly updated offers are key to running a successful service monetisation play. You now must pay far more attention to your pricing models than ever before if you are to succeed in satisfying customers and retaining partners.

Managing high-volume business

Dealing directly with customers and managing up to many billions of interactions daily vs. the one-time purchase relationship seen in product based business requires another huge transition. The fact that each interaction needs to be monetised could be an understandable deterrent. However, if the right infrastructure support is in place, mass volumes of customer-facing interactions and exchanges (including partner settlements) can be managed effectively.

The golden telecom opportunity

Operators, using the best IT services such as business intelligence, customer relationship management and billing, have needed to transform themselves. They have the technology and expertise to help other companies which are now facing similar pressures.

This opportunity comes just when the telecoms industry needs it, as operators are running out of subscriber growth due to markets saturating. SAP has been helping operators develop new revenue streams and change their business models, as well as cutting opex, increasing uptake of new services, and developing new services such as machine-to-machine communications.

Seeing that telecom operators have the best practice for these types of business processes, including scale, security, reliability, expertise in mobile device management, in running and provisioning service platforms (24×7), in addition to micro-billing, it seems obvious that telecom operators are positioned to be the natural choice of partner.

SAP has already identified cases where telcos can provide revenue-generating services to companies across SAP’s 25 industry sectors. To take advantage of this opportunity, they need to turn all this into a platform, so a television set maker could ask them: “These are the customers I’d like to address. Manage them please, with your CRM and billing systems. Produce the bills on my behalf and give me the analytics.” The operation would run in the telco’s cloud as telcos have some of the most reliable data centres in the world.

Many of the large operator groups are already working towards managing smart devices and their connectivity on behalf of enterprise customers. So far these operations are still small, compared with the size of the telecoms industry as a whole, but the potential for growth is sizeable.

More significantly, telecoms operators facing saturation in their own markets can offer valuable services, based on their own networks and OSS/BSS facilities, to a wide range of enterprises that are striving to transition to a service-based model. And SAP is there to help bring them together.

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